MARKET TALK: Last Chance To Place Intel Wager
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
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3:37 (Dow Jones) There are at least a few investors willing to take a chance
on Intel's (INTC) numbers tonight. The Street research sounds awfully
pessimistic, but the shares have bounced along with semis in general after
KLA's (KLAC) pronouncement, and the put/call ratio in the options market is
looking bullish (bearish, of course, if you're a contrarian.) We'll know
soon enough. Intel up 1.8% at $29.69, up from intraday low of $28.06. (TG)
3:21 (Dow Jones) Doesn't happen too often when more than one-third of the 30
DJIA components are up more than a buck, but 11 share that distinction
Tuesday. Actually, the performance of the broader market in general is
pretty impressive given what's on tap - key numbers, potentially dicey, from
Intel shortly, and a huge day on the economic front tomorrow. Techs acting
surprisingly well given the research landscape - SOX up 3.1%, Nasdaq 100
higher by 2.2%, and MSDW High Tech index higher by 1.4%. KLA guidance helps.
DJIA up 136 to 10609, Nasdaq climbs 30 to 2059, and S&P 500 adds 11 to 1213.
(TG)
3:14 (Dow Jones) Of the 49 industries tracked by Mergerstat, 21 of them
showed greater M&A activity in the first six months of this year, compared
with the same period last year. The top three industries: Drugs, Medical
Supplies and Equipment (123 deals in the first half of 2001 versus 87 in the
first half of 2000); Insurance (147 vs. 121); and Brokerage, Investment &
Management Consulting (284 vs. 259). (JAW)
3:08 (Dow Jones) KLA-Tencor (KLAC) CFO reaffirmed 4Q guidance at SemiCon
West conference midday. Consensus sees EPS of 26 cents on sales of $440M.
Company reports final figures on August 31. Stock up 5% to $48.84. (MLP)
3:06 (Dow Jones) The process of "losing" the failing dot-coms is about 75%
to 80% complete, according to U.S. Bancorp Piper Jaffray analyst Safa
Rashtchy. Next year, he says, we'll look back and say we saw the worst of
the dot-com problems by the end of this year's 2Q. Dot-coms that have
reached "relative stability," in Rashtchy's opinion, include Yahoo (YHOO),
Amazon (AMZN) and Cnet (CNET). Those that haven't stabilized are DoubleClick
(DCLK), LookSmart (LOOK), AskJeeves (ASKJ), Digital Impact (DIGI), Vicinity
(VCNT), InfoSpace (INSP) and CMGI (CMGI). Two firms, he says, "were doing
fine all along": EBay (EBAY) and Goto.com (GOTO). (PDL)
3:00 (Dow Jones) Merrill Lynch is suggesting investors keep 15% of their
multi-asset portfolios in private equity to try to take advantage of
favorable trends in venture capital and buyouts. "The private equity asset
class is relevant and adds value to the total portfolio," the firm says. If
anything, at just 15%, Merrill says it might be "understating the
valued-added of private equity." (RJH)
2:54 (Dow Jones) The Dow Industrial Average is closing in on resistance at
10650.00. The 10650.00 level has turned back several rallies in the
two-year-old consolidation trading. If DJIA moves decisively above 10650.00,
it's pointed up to 10710.00. (SC)
2:48 (Dow Jones) Global merger and acquisition volume is expected to reach
the $1 trillion mark today, according to Richard Peterson, chief market
strategist with Thomson Financial. Last year, however, newly announced M&A
volume reached that level by March 16. (JAW)
2:38 (Dow Jones) The Nasdaq Composite is crowding key technical resistance
at 2058.82. That resistance is the last important level between the index
and a close above 2122.70, which would be a short-term technical breakout.
(SC)
2:25 (Dow Jones) More on the IPO front...Kraft (KFT), which held the
second-largest IPO ever last month, looks poised to close above its $31
offering price for the first time since its first day of trading on June 13.
Shares are at $31.20, up 49 cents. (RJH)
2:13 (Dow Jones) Not only have there been very few IPOs this year, but
performance has been spotty at best. Just 27 of the 48 U.S. IPOs this year
trade above their offering prices, according to Dealogic CommScan. On the
bright side, Credit Suisse First Boston's deals have had the best overall
performance, rising on average 39%. (RJH)
1:59 (Dow Jones) Land transportation equipment the leading group Tuesday, up
4.6%. Led by Paccar (PCAR) and Cummins (CUM). Heavy machinery - Caterpillar
(CAT) - next in line, followed by diversified mining, S&Ls, and biotech.
Speaking of S&Ls, the sector is one of only a few that is up not only today,
but for the week, month, three months, six months, one year, three years,
and five years. Up an impressive 82% over the past year. (TG)
1:48 (Dow Jones) Sept. S&Ps are inching higher after spending much of
midmorning in negative area on weakness in the DJIAs. If the contract can
successfully pass its intraday high at 1213, it's set to rally a little
more, one floor broker said. Technically speaking, he said, "We set up a
bottom this past hour." (ZHS)
1:31 (Dow Jones) Morgan Stanley notes Semicon West meeting seems fairly well
attended this year, with one caveat: exhibitors and Wall Street analysts
easily outnumber customers. Firm sticking by call of bottoming process in
3Q, and "buy by August" remains thesis, based on expectations for recovery
as year-over-year and sequential growth rates should recover in 4Q and
beyond. (TG)
1:19 (Dow Jones) "The good news is that the bottom is near," says GKST
economist Brian Wesbury. "Fed rate cuts and tax cuts will finally push the
economy upward starting in late 2001." He adds that "an official recession
will be declared" in due course. (JCC)
1:10 (Dow Jones) Some early big trades today in the options market featured
sellers: In Applied Materials (AMAT), an investor sold a large number of
October 42.50 calls. The stock had plunged 9.5% Monday after the company
said it didn't expect a recovery until mid-2002. The options seller, who
earns more than $500 a contract, might feel option volatility is still high
and is selling to take advantage of that. With the stock at $42.64, the
October 42.50 calls traded 10,030 contracts in Philadelphia, and more than
5,000 contracts each at the CBOE and the Amex. At the PHLX, the calls were
down $1.20 to $5.30. (KT)
1:01 (Dow Jones) Credit quality among U.S. junk-rated companies continues to
deteriorate in July, with downgrades outpacing upgrades by 4-to-1, up from
3-to-1 last quarter, says Moody's. That's put a damper on issuance and
returns, which are up just 0.3% on the month as spreads have widened to 779
from 754 basis points. (RTB)
12:45 (Dow Jones) National Association of Manufacturers President Jerry
Jasinowski, saying it's clear the downturn in manufacturing has been nearly
as severe as the 1990-1991 recession, added, "Another cut in interest rates,
when the Fed meets in August, would likely place downward pressure on the
dollar and provide the uptick in demand this economy needs." Whether another
cut would actually weaken the dollar isn't at all clear, traders say. The
dollar is slipping lower Tuesday against the euro. EUR/USD is at $0.8574;
EUR/JPY is at Y107.05; USD/JPY is Y124.86. (JCC JRH)
12:34 (Dow Jones) Odetics' (ODETA) stock is up 21.7% today to $1.68 even
though its independent auditor, Ernst & Young LLP, said the company's
recurring operating losses and working capital deficit raise substantial
doubt about its ability to continue as a going concern. The company
anticipates it will need to raise additional capital even if it gets a new
line of credit, the filing said. (RLG)
12:25 (Dow Jones) Hopefully, taxpayers aren't already spending in
anticipation of their Bush tax-cut refund checks. Turns out the IRS has
goofed, sending 523,000 letters to payers saying they'll receive the maximum
refund, when - in fact - they won't, says the Associated Press. The IRS
blames a computer glitch. Officials stress all the checks themselves will
have proper amounts. (RJH)
12:16 (Dow Jones) Firms are lowering their price targets on Hughes
Electronics (GMH) after the satellite TV concern lowered forecasts Monday
for the second time in five weeks. UBS Warburg cut its price target to $30
from $41, while Deutsche Banc Alex.Brown took its $30 price target to $25.
UBS said Hughes is inexpensive compared with other broadcasters and that it
is likely to beat conservative revised projections. Deutsche Banc cited
takeover value. UBS reiterated its strong buy, Deutsche Banc its buy. GM
Hughes shares adding 14 cents at $19. (CBN)
(END) DOW JONES NEWS 07-17-01
03:38 PM
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